Editorial: The PDAC-saw – by John Cumming (Northern Miner – March 13, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists.[email protected]

The first week of March was dominated by the Prospectors and Developers Association of Canada’s mega-convention in Toronto, with 30,147 investors, analysts, mining executives, geologists, government officials, students and international delegations converging in downtown Toronto, just slightly off last year’s record numbers.

The floor was again overwhelming, with more than 10 interesting things going on at any given time for four days straight, and so many people circulating that you could no longer count on just bumping into someone you wanted to meet.

Not bad at all, considering the sharp downturn for junior miners over the past year. Still, the mood was much more sombre than during the giddiest peaks of 2006 and 2011, and a few juniors couldn’t scratch enough money together to buy an airplane ticket and occupy their hard-to-come-by booths.

Lack of funding for juniors was the number-one topic for speakers and delegates. Number two was the dismal share price performances of so many juniors over the last years, as the term “penny stock” has once again become an accurate description of many companies’ shares, rather than a quaint phrase from another era.

There’s a discernible mental exhaustion in the industry these days, in that so many of the big ideas that powered the mineral exploration industry over the past 15 years have played themselves out, having years ago generated a cascade of price rallies for just about every element on the periodic table, and share-price lifts in the junior explorers looking for them.

(About the only mined mineral commodity left that hasn’t boomed over the past decade is halite. You can almost hear the Howe Street pitches: “Did you know that the Chinese are using 5% more salt in their diet every year?” . . . “I heard McDonalds’ off-the-books salt stockpile doesn’t really exist.”)

The factors driving mineral commodities have remained the same for many years now: the U.S. fiscal fight, the deep cracks in the eurozone, Chinese economic growth rates, emerging market growth, inflation, central bank action, general fiscal policies among the big players, the U.S. dollar and general political risk.

People who have the mental habit of singular fixation will tend to pick one of these above factors to explain everything (hello, gold bugs), but in fact, they’re all contributors to setting commodity prices, with their relative influences ebbing and flowing.